Every tax term explained in plain language. No jargon, no BS.
16 terms
Adjusted Gross Income (AGI)
Total income minus above-the-line deductions
Alternative Minimum Tax (AMT)
Parallel tax system that limits certain deductions
Basis
Your investment in an asset for tax purposes
Bonus Depreciation
Deduct 100% of qualified asset costs in year one
Capital Gains
Profit from selling an asset
Child Tax Credit (CTC)
$2,200 per qualifying child under 17
DIF Score
IRS's secret audit selection score
Earned Income Tax Credit (EITC)
Refundable credit for lower-income workers
Estimated Tax Payments
Quarterly tax payments for income without withholding
First-Time Abatement (FTA)
IRS penalty removal for clean compliance history
Offer in Compromise (OIC)
Settle IRS tax debt for less than owed
Qualified Business Income (QBI) Deduction
20% deduction on pass-through business income
S-Corporation
Pass-through entity that avoids self-employment tax on distributions
SALT Deduction
State and local tax deduction (capped)
Section 179
Immediately deduct the cost of business equipment
Self-Employment Tax
Social Security and Medicare tax for the self-employed
Have a tax question? Rico can explain any term and apply it to your situation.